India
Rajan’s salary makes him a bargain among G20 governors
Indian governor takes home an unusually small sum each year compared with some other G20 governors, and comes out favourably on other metrics too
RBI deputy outlines ‘key tasks’ for market development
Harun Khan lays out the main areas of work in broadening financial markets, including efforts to improve liquidity and access and improving central bank communication around debt management
Reserve Bank of India modifies liquidity framework
Rajan spells out plans to “progressively lower” the liquidity deficit in the banking system as part of a broader shift in focus; RBI cuts policy rate by 25bp with inflation on track
Rajan and Mishra lay down rules of the monetary game
Authors warn current models may display the policy biases of those who built them, calling for better dialogue and analysis of monetary policy spillovers
Banks start to clean up balance sheets after RBI asset quality review
Efforts will enable flow of credit in the long term, deputy says; improving capital buffers and governance structures also beneficial
Rajan offers solution to global policy spillovers
RBI governor sketches rating system designed to hold central banks to account; frank discussion may be enough, he says, but tougher rules in the style of Bretton Woods are also an option
People: New York Fed research head retires, RBNZ appoints new head of currency
James McAndrews will leave the Federal Reserve Bank of New York after 19 years; Steve Gordon gets new portfolio at RBNZ; and more
BIS paper: short-term interest rate may no longer be enough to set policy
Globalised debt markets, the falling long-term interest rate and dollar debt accumulation has altered every major aspect of the monetary transmission mechanism in emerging markets, authors say
Indian government unveils final MPC design
Bill has been amended to cut committee size to six and give governor a casting vote in the event of a tie; government also pressing ahead with plans to clean up banking sector
RBI paper questions impact of global spillovers
Authors find money and credit markets in India are largely unaffected by spillovers, although there is an impact via debt markets and the indirect effects of global growth and inflation
Fiscal dominance can invert transmission mechanism, Lahiri and Patel find
Authors show ‘statutory liquidity requirement’ and fiscal dominance can invert the effects of monetary policy or render it impotent; suggest ‘rebalancing’ India’s reform agenda
Rajan tells banks to prepare for ‘deep surgery’
RBI governor says banks will have until March 2017 to clean up their balance sheets; banking sector represents weak spot of otherwise vibrant economy
RBI report lays ground for trading new derivatives
Working group proposes allowing new interest rate options in India to improve financial institutions' ability to hedge interest rate risk
RBI’s Gandhi: are regulators ‘barking up the right trees’?
Deputy governor stresses effective regulation is not about ever more detailed rules but rather taking a broad view and spotting emerging risks early on
RBI says future action depends on government decisions
Rajan says further easing depends on government budget and the result of pay negotiations; efforts are continuing to improve transmission mechanism, which could push rates down
Rajan flags pitfalls of short-term thinking
RBI governor extols the virtues of macroeconomic stability, defending the central bank’s strict stance on inflation and calling on the government to stick to its fiscal consolidation plans
Monetary policy less effective than structural reform, Davos panellists argue
Structural reform is more effective than monetary or fiscal policy in current conditions, Axel Weber and Raghuram Rajan agree; Weber foresees four Fed rate rises but thinks markets disagree
People: Patel reappointed RBI deputy; Kocherlakota moves to University of Rochester
RBI deputy Urjit Patel gets second three-year term; Narayana Kocherlakota takes up economics chair at University of Rochester; Canadian governor to head BIS’s consultative council for the Americas
Room for monetary policy stimulus has ‘narrowed’ in many EMs, World Bank report warns
Little room left to use monetary or fiscal stimulus in event of growth shock in some countries, report says, pointing to role for structural reform
Economists say Rajan has good chance of staying as RBI governor – if he wants to
Raghuram Rajan is popular enough to be reappointed when his first term ends later this year, but he may have other appealing options, according to observers
IMF paper sees Indian food prices shaping inflation dynamics
Working paper suggests food inflation will continue to outpace non-food inflation in the coming years, while potentially contributing 1.25 percentage points annually to headline figure
RBI sheds new light on debt management strategy
Central bank unveils more detailed approach to communicating debt management plans, laying out a medium-term strategy that will be updated each year
RBI is rebalancing shadow-banking regulation, Gandhi says
The central bank seeks to tighten regulation and move from entity- to activity-based rules, the deputy governor says
Rajan weighs currency movements while RBI holds rates
Governor Raghuram Rajan spells out challenges posed by divergence of dollar and euro in press conference after Reserve Bank of India keeps key rate at 6.75%